This years’ Indian Central Government Budget 2013 was more of a non-event. Industries expected worse with a popular budget with eye only on the upcoming general elections, for that it turned out to be a pretty routine budget. Finance Minister Mr.P.Chidambaram due to his oratory skills seems to have won over the key constituents. But due to mastery of law he probably has masked the bitter sides. Unlike 5 years before, today India’s finance is not all rosy, there is a huge budget deficit and a sense of mutual lack of trust between industries/investors and the Government. But like the wise will say, what went up has to come down and this too shall pass.
In this background, I didn’t follow the budget keenly like the previous years. So as a member when I got the invite from IACC (Indo American Chamber of Commerce) for attending the Post Budget Analysis meeting to be held today I was not sure. Over the last 2-3 years I have reduced/removed my membership in many of the social and other industry associations including INFITT, TiE Chennai, IT SME, Lions Club, KTS (Kani Tamizh Sangam) for various reasons chiefly to take some breather.
Coming back to today’s event. Though I stepped in to it with doubts on how much I will like it, the speakers made it interesting and worth the time.
Thanks to the organizers for a well selected panellist (Listed below) and nice crisp event organization.
- Mr. R. Anand, Partner-Tax & Markets, Ernst & Young P Ltd
- Mr. B. Sriram, Executive Director- Tax & Regulatory services, Price Waterhouse Coopers
- Mr. K. Vaitheeswaran, Chief Executive, K. Vaitheeswaran & Co
- Mr. V. Niranjan, Advocate, Madras High Court
Below are few points that I noted down (by no means comprehensive):
Mr R Anand said Turnover Growth is Vanity, Profit is Sanity, Cash is only Reality. Great quote to remember. Anywhere Any Day – CASH IS KING!!
Deciphering the Current Account Deficit figure, the FM has said in his speech needed by India, translates to about ₹45000Cr Per month.This is a mind-boggling ask. With this hanging over the head, India is Importing ₹8000Cr of fruits,₹10000Cr of Vegetables and the culprit is not Gold Imports. Government has to face the reality of a consumption generation that it leads. Foreign exchange through any means (FII/FDI) is just not coming due to uncertainty in policies. Government could have better served the cause by encouraging exports & dollar revenue simply clarifying many of the ambiguities surrounding tax laws like Service Tax for Exports
Service Tax on Food served in restaurant is ruled by Supreme court as sale of goods and hence a State Subject. But Central budget has introduced Service Tax on Food served in all AC Restaurants, this is going to lead to lot more litigation. Already this area has its share of ambiguities like in Tamil Nadu where the VAT for food ranges widely from 2% to 14% depending on whether the food is branded or not. How do you classify an Idli which doesn’t have a brand printed or baked into it
Success rate of customs, excise and service tax authorities over Taxpayer in cases that were ruled by Supreme Court, High Courts and Tribunals are only in single digits or lower side of double digits. So in over 80% of cases the Taxpayer is hassled by the system
(Yes, you can see me in the above picture at extreme right but being clipped in view)
Over all I got a feeling that most of the speakers were saying that Government has a serious trust deficit on its own taxpayers, as a result is more interested on punitive provisions than encouragement which is what is needed in these globally trying times.